Index for ~~purchase commitments summarized below.~~

~~Future minimum payments for non-cancelable operating leases and purchase commitments are as follows:~~

Notes to the Condensed Consolidated Financial Statements

(in millions) Operating Leases Purchase Commitments
Year ending September 30,
2018 $ 2,397
$ 2,477
2019 2,153
1,210
2020 1,867
1,015
2021 1,472
759
2022 1,163
661
Thereafter 2,240
904
Total $ 11,292
$ 7,026

fixed-rate debt. The fair value of interest rate lock derivatives as of June 30, 2019, was a liability of $1.1 billion and is included in Other current liabilities in our Condensed Consolidated Balance Sheets. See Note 7 – Fair Value Measurements for further information.

Renewable Energy Purchase Agreements

In ~~January 2017,~~April 2019, T-Mobile USA entered into a ~~REPA~~Renewable Energy Purchase Agreement (“REPA”) with ~~Red Dirt Wind Project, LLC. The agreement~~a third party that is based on the expected operation of a ~~wind energy-generating~~solar photovoltaic electrical generation facility located in ~~Oklahoma~~Texas and will remain in effect until the ~~twelfth~~fifteenth anniversary of the facility’s entry into commercial operation. Commercial operation of the facility is expected to occur ~~by the end of 2017.~~in July 2021. The REPA consists of ~~two components: (1)~~ an energy forward agreement that is net settled based on energy prices and the energy output generated by the ~~facility and (2) a commitment to purchase the renewable energy credits (“RECs”) associated with the energy output generated by the~~ facility. T-Mobile USA will net settle the forward agreement and acquire the RECs monthly by paying, or receiving, an aggregate net payment based on two variables (1) the facility’s energy output, which has an estimated maximum capacity of approximately 160 megawatts and (2) the difference between (a) an initial fixed price, subject to annual escalation, and (b) current local marginal energy prices during the monthly settlement period. We have determined that the REPA does not meet the definition of a derivative because the expected energy output of the facility may not be reliably estimated (the arrangement lacks a notional amount). The REPA does not contain any unconditional purchase obligations because amounts under the agreement are not fixed and determinable. Our participation in the REPA did not require an upfront investment or capital commitment. We do not control the activities that most significantly impact the energy-generating facility, nor do we direct the use of, or receive specific energy output from, ~~it. No amounts were settled under the agreement during the nine months ended September 30, 2017.~~

In August 2017, T-Mobile USA entered into a REPA with Solomon Forks Wind Project, LLC. The agreement is based on the expected operation of a wind energy-generating facility located in Kansas and will remain in effect until the fifteenth anniversary of the facility’s entry into commercial operation. Commercial operation of the facility is expected to occur by the end of 2018. The REPA consists of two components: (1) an energy forward agreement that is net settled based on energy prices and the energy output generated by the facility and (2) a commitment to purchase the environmental attributes (“EACs”) associated with the energy output generated by the facility. T-Mobile USA will net settle the forward agreement and acquire the EACs monthly by paying, or receiving, an aggregate net payment based on two variables (1) the facility’s energy output, which has an estimated maximum capacity of approximately 160 megawatts and (2) the difference between (a) an initial fixed price, subject to annual escalation, and (b) current local marginal energy prices during the monthly settlement period. We have determined that the REPA does not meet the definition of a derivative because the expected energy output of the facility may not be reliably estimated (the arrangement lacks a notional amount). The REPA does not contain any unconditional purchase obligations because amounts under the agreement are not fixed and determinable. Our participation in the REPA did not require an upfront investment or capital commitment. We do not control the activities that most significantly impact the energy-generating facility nor do we receive specific energy output from it. No amounts were settled under the agreement during the nine months ended September 30, 2017.

Contingencies and Litigation

Litigation Matters

We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation Matters”) that arise in the ordinary course of business, which include ~~numerous court actions alleging that we are infringing various patents. Virtually all~~claims of ~~the~~ patent infringement ~~cases~~(most of which are ~~brought~~asserted by non-practicing entities primarily seeking monetary damages), class actions, and ~~effectively seek only monetary damages, although they occasionally seek injunctive relief as well.~~proceedings to enforce FCC rules and regulations. The Litigation Matters described above have progressed to various stages and some of them may proceed to trial, arbitration, hearing or other adjudication that could ~~include an award~~result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate, which is reflected in the ~~condensed consolidated financial statements~~Consolidated Financial Statements but that ~~we do~~is not ~~consider,~~considered to be, individually or in the aggregate, material. An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated. For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including but not limited ~~to:~~to uncertainty concerning legal theories and their resolution by courts or ~~regulators;~~regulators, uncertain damage theories and ~~demands;~~demands, and a less than fully developed factual record. While we do not expect that the ultimate resolution of these proceedings, individually or in the aggregate, will have a material adverse effect on our financial position, an unfavorable outcome of some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

Note 13 – Subsequent Event

In July 2019, we entered into various agreements, including an amendment to the Business Combination Agreement, in connection with the Merger. See Note 3 – Business Combinations for further information.

Index for Notes to the Condensed Consolidated Financial Statements

Note 1114 – Guarantor Financial Information

Pursuant to the applicable indentures and supplemental indentures, the long-term debt to affiliates and third parties ~~excluding Senior Secured Term Loans and capital leases,~~ issued by T-Mobile USA (“Issuer”) is fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of the Issuer’s 100% owned subsidiaries (“Guarantor Subsidiaries”).

In January 2017, T-Mobile USA, and certain of its affiliates, as guarantors, borrowed $4.0 billion under the Incremental Term Loan Facility to refinance $1.98 billion of outstanding secured term loans under its Term Loan Credit Agreement dated November 9, 2015, with the remaining net proceeds from the transaction intended to be used to redeem callable high yield debt.

In March 2017, T-Mobile USA and certain of its affiliates, as guarantors, (i) issued $500 million in aggregate principal amount of public 4.000% Senior Notes due 2022, (ii) issued $500 million in aggregate principal amount of public 5.125% Senior Notes due 2025 and (iii) issued $500 million in aggregate principal amount of public 5.375% Senior Notes due 2027.

In April 2017, T-Mobile USA and certain of its affiliates, as guarantors, (i) issued $1.0 billion in aggregate principal amount of 4.000% Senior Notes due 2022, (ii) issued $1.25 billion in aggregate principal amount of 5.125% Senior Notes due 2025 and (iii) issued $750 million in aggregate principal amount of 5.375% Senior Notes due 2027. Additionally, T-Mobile USA and certain of its affiliates, as guarantors, redeemed through net settlement, the $1.25 billion outstanding aggregate principal amount of the 6.288% Senior Reset Notes to affiliates due 2019 and $1.25 billion in aggregate principal amount of the 6.366% Senior Reset Notes to affiliates due 2020.

In May 2017, T-Mobile USA and certain of its affiliates, as guarantors, (i) issued $2.0 billion in aggregate principal amount of 5.300% Senior Notes due 2021, (ii) issued $1.35 billion in aggregate principal amount of 6.000% Senior Notes due 2024 and (iii) issued $650 million in aggregate principal amount of 6.000% Senior Notes due 2024.

~~In September 2017, T-Mobile USA and certain of its affiliates, as guarantors, issued the remaining $500 million in aggregate principal amount of 5.375% Senior Notes due 2027.~~

~~See~~ ~~Note 7 - Debt~~ ~~for further information.~~

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The indentures and credit facilities governing the long-term debt contain covenants that, among other things, limit the ability of the Issuer and the Guarantor Subsidiaries ~~to:~~to incur more ~~debt;~~debt, pay dividends and make ~~distributions;~~distributions, make certain ~~investments;~~investments, repurchase ~~stock;~~stock, create liens or other ~~encumbrances;~~encumbrances, enter into transactions with ~~affiliates;~~affiliates, enter into transactions that restrict dividends or distributions from ~~subsidiaries;~~subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the credit facilities, indentures and supplemental indentures relating to the long-term debt restrict the ability of the Issuer to loan funds or make payments to Parent. However, the Issuer

and Guarantor Subsidiaries are allowed to make certain permitted payments to the Parent under the terms of the indentures and the supplemental indentures.

On October 23, 2018, SLMA LLC was formed as a limited liability company in Delaware to serve as an escrow subsidiary to facilitate the contemplated issuance of notes by Parent in connection with the Transactions. SLMA LLC is an indirect, 100% owned finance subsidiary of Parent, as such term is used in Rule 3-10(b) of Regulation S-X, and has been designated as an unrestricted subsidiary under the Issuer’s existing debt securities. Any debt securities that may be issued from time to time by SLMA LLC will be fully and unconditionally guaranteed by Parent.

Presented below is the condensed consolidating financial information as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016.~~2018.

Index for Notes to the Condensed Consolidated Financial Statements

Condensed Consolidating Balance Sheet Information

~~September~~June 30, ~~2017~~2019


(in millions)	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated		Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Assets
Current assets
Cash and cash equivalents	$	29	$	2	$	678	$	30		$	—		$	739	$	4	$	2	$	970	$	129		$	—		$	1,105
Accounts receivable, net	—		—		1,504		230			—			1,734		—		—		1,526		291			—			1,817
Equipment installment plan receivables, net	—		—		2,136		—			—			2,136		—		—		2,446		—			—			2,446
Accounts receivable from affiliates	—		6		24		—			(6		)	24		—		—		18		—			—			18
Inventories	—		—		999		—			—			999
Inventory															—		—		998		—			—			998
Other current assets	—		—		1,241		576			—			1,817		—		—		1,052		678			—			1,730
Total current assets	29		8		6,582		836			(6		)	7,449		4		2		7,010		1,098			—			8,114
Property and equipment, net ⁽¹⁾	—		—		21,248		322			—			21,570		—		—		21,535		312			—			21,847
Operating lease right-of-use assets															—		—		10,436		3			—			10,439
Financing lease right-of-use assets															—		—		2,589		—			—			2,589
Goodwill	—		—		1,683		—			—			1,683		—		—		1,683		218			—			1,901
Spectrum licenses	—		—		35,007		—			—			35,007		—		—		36,430		—			—			36,430
Other intangible assets, net	—		—		256		—			—			256		—		—		85		72			—			157
Investments in subsidiaries, net	19,823		37,943		—		—			(57,766		)	—		27,332		49,416		—		—			(76,748		)	—
Intercompany receivables and note receivables	425		8,903		—		—			(9,328		)	—		—		4,618		—		—			(4,618		)	—
Equipment installment plan receivables due after one year, net	—		—		1,100		—			—			1,100		—		—		1,604		—			—			1,604
Other assets	—		3		778		292			(215		)	858		—		8		1,637		226			(164		)	1,707
Total assets	$	20,277	$	46,857	$	66,654	$	1,450		$	(67,315	)	$	67,923	$	27,336	$	54,044	$	83,009	$	1,929		$	(81,530	)	$	84,788
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	—	$	201	$	5,626	$	244		$	—		$	6,071	$	—	$	229	$	6,736	$	295		$	—		$	7,260
Payables to affiliates	—		250		38		—			—			288		—		147		51		—			—			198
Short-term debt	—		3		555		—			—			558		—		300		—		—			—			300
Short-term debt to affiliates	—		—		6		—			(6		)	—
Deferred revenue	—		—		790		—			—			790		—		—		619		1			—			620
Short-term operating lease liabilities															—		—		2,265		3			—			2,268
Short-term financing lease liabilities															—		—		963		—			—			963
Other current liabilities	—		—		219		177			—			396		—		1,097		154		313			—			1,564
Total current liabilities	—		454		7,234		421			(6		)	8,103		—		1,773		10,788		612			—			13,173
Long-term debt	—		11,913		1,250		—			—			13,163		—		10,954		—		—			—			10,954
Long-term debt to affiliates	—		14,586		—		—			—			14,586		—		13,985		—		—			—			13,985
Tower obligations ⁽¹⁾	—		—		395		2,204			—			2,599		—		—		76		2,171			—			2,247
Deferred tax liabilities	—		—		5,750		—			(215		)	5,535		—		—		5,254		—			(164		)	5,090
Deferred rent expense	—		—		2,693		—			—			2,693
Operating lease liabilities															—		—		10,145		—			—			10,145
Financing lease liabilities															—		—		1,314		—			—			1,314
Negative carrying value of subsidiaries, net	—		—		596		—			(596		)	—		—		—		815		—			(815		)	—
Intercompany payables and debt	—		—		9,119		209			(9,328		)	—		369		—		3,872		377			(4,618		)	—
Other long-term liabilities	—		81		884		2			—			967		—		—		890		23			—			913
Total long-term liabilities	—		26,580		20,687		2,415			(10,139		)	39,543		369		24,939		22,366		2,571			(5,597		)	44,648
Total stockholders' equity (deficit)	20,277		19,823		38,733		(1,386		)	(57,170		)	20,277		26,967		27,332		49,855		(1,254		)	(75,933		)	26,967
Total liabilities and stockholders' equity	$	20,277	$	46,857	$	66,654	$	1,450		$	(67,315	)	$	67,923	$	27,336	$	54,044	$	83,009	$	1,929		$	(81,530	)	$	84,788



~~(1)~~	~~The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See~~ ~~Note 1 - Basis of Presentation~~ ~~for further detail.~~

Index for Notes to the Condensed Consolidated Financial Statements

Condensed Consolidating Statement of Cash Flows Information

Three Months Ended June 30, 2018



(in millions)	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	(1	)	$	(258	)	$	2,932		$	(1,282	)	$	(130	)	$	1,261
Investing activities
Purchases of property and equipment	—			—			(1,624		)	(5		)	—			(1,629		)
Purchases of spectrum licenses and other intangible assets, including deposits	—			—			(28		)	—			—			(28		)
Proceeds related to beneficial interests in securitization transactions	—			—			12			1,311			—			1,323
Acquisition of companies, net of cash acquired	—			—			(5		)	—			—			(5		)
Equity investment in subsidiary	—			—			(26		)	—			26			—
Other, net	—			—			33			—			—			33
Net cash (used in) provided by investing activities	—			—			(1,638		)	1,306			26			(306		)
Financing activities
Payments of consent fees related to long-term debt	—			—			(38		)	—			—			(38		)
Proceeds from borrowing on revolving credit facility, net	—			2,070			—			—			—			2,070
Repayments of revolving credit facility	—			—			(2,195		)	—			—			(2,195		)
Repayments of financing lease obligations	—			—			(154		)	(1		)	—			(155		)
Repayments of long-term debt	—			—			(2,350		)	—			—			(2,350		)
Repurchases of common stock	(405		)	—			—			—			—			(405		)
Intercompany advances, net	405			(1,810		)	1,406			(1		)	—			—
Equity investment from parent	—			—			—			26			(26		)	—
Tax withholdings on share-based awards	—			—			(10		)	—			—			(10		)
Cash payments for debt prepayment or debt extinguishment costs	—			—			(181		)	—			—			(181		)
Intercompany dividend paid	—			—			—			(130		)	130			—
Other, net	1			—			(4		)	—			—			(3		)
Net cash provided (used in) by financing activities	1			260			(3,526		)	(106		)	104			(3,267		)
Change in cash and cash equivalents	—			2			(2,232		)	(82		)	—			(2,312		)
Cash and cash equivalents
Beginning of period	1			1			2,395			130			—			2,527
End of period	$	1		$	3		$	163		$	48		$	—		$	215

Index for Notes to the Condensed Consolidated Financial Statements

Condensed Consolidating Statement of Cash Flows Information

Six Months Ended June 30, 2019



(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—	$	(372	)	$	5,909		$	(1,703	)	$	(295	)	$	3,539
Investing activities
Purchases of property and equipment	—		—			(3,666		)	(54		)	—			(3,720		)
Purchases of spectrum licenses and other intangible assets, including deposits	—		—			(850		)	—			—			(850		)
Proceeds related to beneficial interests in securitization transactions	—		—			17			1,979			—			1,996
Other, net	—		—			(7		)	—			—			(7		)
Net cash (used in) provided by investing activities	—		—			(4,506		)	1,925			—			(2,581		)
Financing activities
Proceeds from borrowing on revolving credit facility, net	—		1,765			—			—			—			1,765
Repayments of revolving credit facility	—		—			(1,765		)	—			—			(1,765		)
Repayments of financing lease obligations	—		—			(314		)	(1		)	—			(315		)
Repayments of long-term debt	—		—			(600		)	—			—			(600		)
Intercompany advances, net	—		(1,392		)	1,310			82			—			—
Tax withholdings on share-based awards	—		—			(104		)	—			—			(104		)
Cash payments for debt prepayment or debt extinguishment costs	—		—			(28		)	—			—			(28		)
Intercompany dividend paid	—		—			—			(295		)	295			—
Other, net	2		—			(11		)	—			—			(9		)
Net cash provided (used in) by financing activities	2		373			(1,512		)	(214		)	295			(1,056		)
Change in cash and cash equivalents	2		1			(109		)	8			—			(98		)
Cash and cash equivalents
Beginning of period	2		1			1,079			121			—			1,203
End of period	$	4	$	2		$	970		$	129		$	—		$	1,105

Index for Notes to the Condensed Consolidated Financial Statements

Condensed Consolidating Statement of Cash Flows Information

~~Three~~Six Months Ended ~~September~~June 30, ~~2017~~2018



(in millions)	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—		$	(662	)	$	5,306		$	(2,483	)	$	(130	)	$	2,031
Investing activities
Purchases of property and equipment	—			—			(2,990		)	(5		)	—			(2,995		)
Purchases of spectrum licenses and other intangible assets, including deposits	—			—			(79		)	—			—			(79		)
Proceeds related to beneficial interests in securitization transactions	—			—			25			2,593			—			2,618
Acquisition of companies, net of cash	—			—			(338		)	—			—			(338		)
Equity investment in subsidiary	—			—			(26		)	—			26			—
Other, net	—			—			26			—			—			26
Net cash (used in) provided by investing activities	—			—			(3,382		)	2,588			26			(768		)
Financing activities
Proceeds from issuance of long-term debt	—			2,494			—			—			—			2,494
Payments of consent fees related to long-term debt	—			—			(38		)	—			—			(38		)
Proceeds from borrowing on revolving credit facility, net	—			4,240			—			—			—			4,240
Repayments of revolving credit facility	��			—			(3,920		)	—			—			(3,920		)
Repayments of financing lease obligations	—			—			(326		)	(1		)	—			(327		)
Repayments of long-term debt	—			—			(3,349		)	—			—			(3,349		)
Repurchases of common stock	(1,071		)	—			—			—			—			(1,071		)
Intercompany advances, net	995			(6,070		)	5,085			(10		)	—			—
Equity investment from parent	—			—			—			26			(26		)	—
Tax withholdings on share-based awards	—			—			(84		)	—			—			(84		)
Cash payments for debt prepayment or debt extinguishment costs	—			—			(212		)	—			—			(212		)
Intercompany dividend paid	—			—			—			(130		)	130			—
Other, net	3			—			(3		)	—			—			—
Net cash (used in) provided by financing activities	(73		)	664			(2,847		)	(115		)	104			(2,267		)
Change in cash and cash equivalents	(73		)	2			(923		)	(10		)	—			(1,004		)
Cash and cash equivalents
Beginning of period	74			1			1,086			58			—			1,219
End of period	$	1		$	3		$	163		$	48		$	—		$	215

Index for Notes to the Condensed Consolidated Financial Statements

(in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated
Operating activities
Net cash provided by (used in) operating activities $ (2 ) $ (1,554 ) $ 3,904
$ 14
$ —
$ 2,362

Investing activities
Purchases of property and equipment —
—
(1,441 ) —
—
(1,441 )
Purchases of spectrum licenses and other intangible assets, including deposits —
—
(15 ) —
—
(15 )
Other, net —
—
1
—
—
1
Net cash used in investing activities —
—
(1,455 ) —
—
(1,455 )

Financing activities
Proceeds from issuance of long-term debt —
500
—
—
—
500
Proceeds from borrowing on revolving credit facility, net —
1,055
—
—
—
1,055
Repayments of revolving credit facility —
—
(1,735 ) —
—
(1,735 )
Repayments of capital lease obligations —
—
(141 ) —
—
(141 )
Repayments of short-term debt for purchases of inventory, property and equipment, net —
—
(4 ) —
—
(4 )
Tax withholdings on share-based awards —
—
(6 ) —
—
(6 )
Dividends on preferred stock (13 ) —
—
—
—
(13 )
Other, net 1
—
(6 ) —
—
(5 )
Net cash (used in) provided by financing activities (12 ) 1,555
(1,892 ) —
—
(349 )
Change in cash and cash equivalents (14 ) 1
557
14
—
558
Cash and cash equivalents
Beginning of period 43
1
121
16
—
181
End of period $ 29
$ 2
$ 678
$ 30
$ —
$ 739

~~Condensed Consolidating Statement of Cash Flows Information~~

~~Three Months Ended September 30, 2016~~

~~Condensed Consolidating Statement of Cash Flows Information~~

~~Nine Months Ended September 30, 2017~~

(in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated
Operating activities
Net cash provided by (used in) operating activities $ —
$ (16,429 ) $ 22,370
$ 43
$ (80 ) $ 5,904

Investing activities
Purchases of property and equipment —
—
(4,316 ) —
—
(4,316 )
Purchases of spectrum licenses and other intangible assets, including deposits —
—
(5,820 ) —
—
(5,820 )
Equity investment in subsidiary (308 ) —
—
—
308
—
Other, net —
—
(2 ) —
—
(2 )
Net cash used in investing activities (308 ) —
(10,138 ) —
308
(10,138 )

Financing activities
Proceeds from issuance of long-term debt —
10,480
—
—
—
10,480
Proceeds from borrowing on revolving credit facility, net —
2,910
—
—
—
2,910
Repayments of revolving credit facility —
—
(2,910 ) —
—
(2,910 )
Repayments of capital lease obligations —
—
(350 ) —
—
(350 )
Repayments of short-term debt for purchases of inventory, property and equipment, net —
—
(296 ) —
—
(296 )
Repayments of long-term debt —
—
(10,230 ) —
—
(10,230 )
Equity investment from parent —
308
—
—
(308 ) —
Tax withholdings on share-based awards —
—
(101 ) —
—
(101 )
Intercompany dividend paid —
—
—
(80 ) 80
—
Dividends on preferred stock (41 ) —
—
—
—
(41 )
Other, net 20
—
(9 ) —
—
11
Net cash (used in) provided by financing activities (21 ) 13,698
(13,896 ) (80 ) (228 ) (527 )
Change in cash and cash equivalents (329 ) (2,731 ) (1,664 ) (37 ) —
(4,761 )
Cash and cash equivalents
Beginning of period 358
2,733
2,342
67
—
5,500
End of period $ 29
$ 2
$ 678
$ 30
$ —
$ 739

~~Condensed Consolidating Statement of Cash Flows Information~~

~~Nine Months Ended September 30, 2016~~

(in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated
Operating activities
Net cash provided by (used in) operating activities $ 4
$ (2,165 ) $ 6,745
$ 59
$ (110 ) $ 4,533

Investing activities
Purchases of property and equipment —
—
(3,843 ) —
—
(3,843 )
Purchases of spectrum licenses and other intangible assets, including deposits —
—
(3,544 ) —
—
(3,544 )
Sales of short-term investments —
2,000
998
—
—
2,998
Other, net —
—
3
—
—
3
Net cash provided by (used in) investing activities —
2,000
(6,386 ) —
—
(4,386 )

Financing activities
Proceeds from issuance of long-term debt —
997
—
—
—
997
Repayments of capital lease obligations —
—
(133 ) —
—
(133 )
Repayments of short-term debt for purchases of inventory, property and equipment, net —
—
(150 ) —
—
(150 )
Repayments of long-term debt —
—
(15 ) —
—
(15 )
Tax withholdings on share-based awards —
—
(52 ) —
—
(52 )
Intercompany dividend paid —
—
—
(110 ) 110
—
Dividends on preferred stock (41 ) —
—
—
—
(41 )
Other, net 25
—
(8 ) —
—
17
Net cash (used in) provided by financing activities (16 ) 997
(358 ) (110 ) 110
623
Change in cash and cash equivalents (12 ) 832
1
(51 ) —
770
Cash and cash equivalents
Beginning of period 378
1,767
2,364
73
—
4,582
End of period $ 366
$ 2,599
$ 2,365
$ 22
$ —
$ 5,352

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. The following important factors, along with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, as supplemented by the Risk Factors included in Part II, Item 1A below, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:

the failure to obtain, or delays in obtaining, required regulatory approvals for the merger (the “Merger”) with Sprint Corporation (“Sprint”), pursuant to the Business Combination Agreement with Sprint and other parties therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), risks associated with the actions and conditions we have agreed to in connection with such approvals, and the risk that such approvals may result in the imposition of additional conditions that, if accepted by the parties, could adversely affect the combined company or the expected benefits of the Transactions, or the failure to satisfy any of the other conditions to the Transactions on a timely basis or at all;

the occurrence of events that may give rise to a right of one or both of the parties to terminate the Business Combination Agreement;

adverse effects on the market price of our common stock or on our operating results because of a failure to complete the Merger in the anticipated timeframe, on the anticipated terms or at all;

inability to obtain the financing contemplated to be obtained in connection with the Transactions on the expected terms or timing or at all;

the ability of us, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein;

adverse changes in the ratings of our or Sprint’s debt securities or adverse conditions in the credit markets;

negative effects of the announcement, pendency or consummation of the Transactions on the market price of our common stock and on our or Sprint’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships;

significant costs related to the Transactions, including financing costs and unknown liabilities of Sprint or that may arise;

failure to realize the expected benefits and synergies of the Transactions in the expected timeframes, in part or at all;

costs or difficulties related to the integration of Sprint’s network and operations into our network and operations, including intellectual property and communications systems, administrative and information technology infrastructure and accounting, financial reporting and internal control systems, and the alignment of the two companies’ guidelines and practices;

costs or difficulties related to the completion of Divestiture Transaction and the satisfaction of the Government Commitments (as defined below);

the risk of litigation or regulatory actions related to the Transactions, including the antitrust litigation related to the Transactions brought by the attorneys general of thirteen states and the District of Columbia;

the inability of us, Sprint or the combined company to retain and hire key personnel;

the risk that certain contractual restrictions contained in the Business Combination Agreement during the pendency of the Transactions could adversely affect our or Sprint’s ability to pursue business opportunities or strategic transactions;

adverse economic, political or ~~political~~market conditions in the U.S. and international markets;

competition, industry consolidation, and changes in the market for wireless services, ~~market, including new competitors entering the industry as technologies converge;~~which could negatively affect our ability to attract and retain customers;

the effects of any future merger, investment, or acquisition involving us, as well as the effects of mergers, investments, or acquisitions in the technology, media and telecommunications industry;

challenges in implementing our business strategies or funding our ~~wireless~~ operations, including payment for additional spectrum or network upgrades;

Index for Notes to the Condensed Consolidated Financial Statements

the possibility that we may be unable to renew our spectrum licenses on attractive terms or acquire new spectrum licenses at reasonable costs and terms;

difficulties in managing growth in wireless data services, including network quality;

material changes in available ~~technology;~~technology and the effects of such changes, including product substitutions and deployment costs and performance;

the timing, scope and financial impact of our deployment of advanced network and business technologies;

the impact on our networks and business from major technology equipment failures;

inability to implement and maintain effective cyber security measures over critical business systems;

breaches of our and/or our ~~third party~~third-party vendors’ networks, information technology (“IT”) and data ~~security;~~security, resulting in unauthorized access to customer confidential information;

natural disasters, terrorist attacks or similar incidents;

unfavorable outcomes of existing or future litigation;

any changes in the regulatory environments in which we operate, including any increase in restrictions on the ability to operate our ~~networks;~~networks and changes in data privacy laws;

any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services;

material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact;

~~the ability to make payments on our debt or to repay our existing indebtedness when due;~~

~~adverse change in the ratings of our debt securities or adverse conditions in the credit markets;~~

changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings; ~~and~~

changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing ~~jurisdictions.~~jurisdictions;

the possibility that the reset process under our trademark license results in changes to the royalty rates for our trademarks;

the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;

our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective;

the occurrence of high fraud rates related to device financing, credit card, dealers, or subscriptions; and

interests of a majority stockholder may differ from the interests of other stockholders.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. In this Form 10-Q, unless the context indicates otherwise, references to “T-Mobile,” “T-Mobile US,” “our Company,” “the Company,” “we,” “our,” and “us” refer to T-Mobile US, Inc., a Delaware corporation, and its wholly-owned subsidiaries.

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to also use the @TMobileIR Twitter account (https://twitter.com/TMobileIR) and the @JohnLegere Twitter (https://twitter.com/JohnLegere), Facebook and Periscope accounts, which Mr. Legere also uses as means for personal communications and observations, as means of disclosing information about ~~the Company~~us and ~~its~~our services and for complying with ~~its~~our disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following ~~the Company’s~~our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on ~~the Company’s~~our investor relations website.

Overview

The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our condensed consolidated financial statements with the following:

A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;

Context to the financial statements; and

Index for Notes to the Condensed Consolidated Financial Statements

Information that allows assessment of the likelihood that past performance is indicative of future performance.

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2019, included in Part I, Item 1 of this Form 10-Q and audited ~~Consolidated Financial Statements~~consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc. and its consolidated subsidiaries.

Business Overview

~~Effective January 1, 2017,~~In April 2019, we introduced TVision^TM Home, a rebranded and upgraded version of Layer3 TV. TVision^TM Home delivers what customers want most from high-end home TV, including a premium TV experience and HD and 4K channels. TVision^TM Home launched in eight markets.

In April 2019, we launched T-Mobile MONEY nationwide, offering customers a no-fee, interest-earning, mobile-first checking account which can be opened and managed from customers’ smartphones. Accounts are held at BankMobile, a Division of Customers Bank.

Magenta Plans

In June 2019, we rebranded our T-Mobile ONE and ONE Plus plans to Magenta and Magenta Plus. The Magenta plan adds 3GB of high-speed smartphone hotspot, or tethering, per line and unlimited 3G tethering thereafter and includes a Netflix Basic subscription for customers with family plans. The Magenta Plus plan benefits remain the ~~imputed discount on EIP receivables, which is amortized over~~same as the ~~financed installment term using~~ONE Plus plan and includes a Netflix Standard subscription for customers with family plans.

Proposed Sprint Transaction

On April 29, 2018, we entered into the ~~effective interest method~~Business Combination Agreement to merge with Sprint in an all-stock transaction at a fixed exchange ratio of 0.10256 shares of T-Mobile common stock for each share of Sprint common stock, or 9.75 shares of Sprint common stock for each share of T-Mobile common stock. The combined company will be named “T-Mobile” and, was previously recognized within Interest income in our Consolidated Statements of Comprehensive Income, is recognized within Other revenues in our Condensed Consolidated Statements of Comprehensive Income. We believe this presentation is preferable because it providesas a better representation of amounts earned from the Company’s major ongoing operations and aligns with industry practice thereby enhancing comparability. We have applied this change retrospectively and the effect of this change for the three and nine months ended September 30, 2016, was a reclassification of $59 million and $189 million, respectively, from Interest income to Other revenues. The amortization of imputed discount on our EIP receivables for the three and nine months ended September 30, 2017, was $74 million and $204 million, respectively. For additional information, see ~~Note 1 - Basis of Presentation~~result of the Merger, is expected to be able to rapidly launch a broad and deep nationwide 5G network, accelerate innovation and increase competition in the U.S. wireless, video and broadband industries. Immediately following the Merger, it is anticipated that Deutsche Telekom AG (“DT”) and SoftBank Group Corp. (“SoftBank”) will hold, directly or indirectly, on a fully diluted basis, approximately 41.7% and 27.4%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 30.9% of the outstanding T-Mobile common stock held by other stockholders, based on closing share prices and certain other assumptions as of December 31, 2018. The consummation of the Merger remains subject to regulatory approvals and certain other customary closing conditions. We expect to receive final federal regulatory approval in the third quarter of 2019 and currently anticipate that the Merger will be permitted to close in the second half of the year.

For more information regarding our Business Combination Agreement, see Note 3 – Business Combinations of the Notes to the Condensed Consolidated Financial ~~Statements.~~Statements.

~~In January 2017, we introduced, Un-carrier Next, where monthly wireless service fees and sales taxes are included in~~T-Mobile Added to S&P 500

T-Mobile was added to the ~~advertised monthly recurring charge for T-Mobile ONE.~~S&P 500 Index effective prior to the open of trading on July 15, 2019. We ~~also unveiled Kickback on T-Mobile ONE, where participating customers who use 2 GB or less of data in a month, will get up~~were added to ~~a $10 credit per qualifying line on their next month’s bill. In addition, we introduced~~ the ~~Un-contract for T-Mobile ONE with the first-ever price guarantee on an unlimited 4G LTE plan which allows current T-Mobile ONE customers to keep their price for service until they decide to change it.~~S&P 500 GICS (Global Industry Classification Standard) Wireless Telecommunication Services Sub-Industry index.

In September 2017, we introduced, Un-carrier Next: Netflix On Us, through an exclusive new partnership with Netflix where a standard monthly Netflix service plan is included at no charge to qualifying T-Mobile ONE customers on family plans.

Accounting Pronouncements Adopted During the ~~third quarter~~Current Year

Leases

On January 1, 2019, we adopted the new lease standard. See Note 1 – Summary of ~~2017,~~Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements for information regarding the impact of our ~~operations in Texas, Florida and Puerto Rico experienced losses related~~adoption of the new lease standard.

Index for Notes to ~~hurricanes. Based on our preliminary assessment,~~ the ~~approximate impacts for the three and nine months ended September 30, 2017~~, from lost revenue, assets damaged or destroyed and other hurricane related costs incurred are included in the table below. As of September 30, 2017, our loss assessment is ongoing and we expect additional expenses to be incurred and customer activity to be impacted in the fourth quarter of 2017, primarily related to our operations in Puerto Rico. We have not recognized any potential insurance recoveries related to those hurricane losses as we continue to assess the damage and work with our insurance carriers.

Condensed Consolidated Financial Statements

(in millions, except per share amounts, ARPU, ABPU, and bad debt expense and losses from sales of receivables as a percentage of total revenues) Three Months Ended September 30, Nine Months Ended September 30,
2017 2017
Increase (Decrease)
Revenues
Branded postpaid revenues $ (20 ) $ (20 )
Of which, branded postpaid phone revenues (19 ) (19 )
Branded prepaid revenues (11 ) (11 )
Total service revenues (31 ) (31 )
Equipment revenues (8 ) (8 )
Total revenues $ (39 ) $ (39 )

Operating expenses
Cost of services $ 69
$ 69
Cost of equipment sales 4
4
Selling, general and administrative 36
36
Of which, bad debt expense 20
20
Total operating expense $ 109
$ 109

Operating income $ (148 ) $ (148 )
Net income $ (90 ) $ (90 )

Earnings per share - basic $ (0.11 ) $ (0.11 )
Earnings per share - diluted $ (0.10 ) $ (0.10 )

Operating measures
Bad debt expense and losses from sales of receivables as a percentage of total revenues 0.20 % 0.07 %
Branded postpaid phone ARPU $ (0.19 ) $ (0.07 )
Branded postpaid ABPU $ (0.18 ) $ (0.06 )
Branded prepaid ARPU $ (0.18 ) $ (0.06 )

Non-GAAP financial measures
Adjusted EBITDA $ (148 ) $ (148 )

Results of Operations

Highlights for the three months ended ~~September~~June 30, ~~2017,~~2019, compared to the same period in ~~2016~~2018

Total revenues of ~~$10.0~~$11.0 billion for the three months ended ~~September~~June 30, ~~2017,~~2019 increased ~~$714~~$408 million, or 8%4%, primarily driven by growth in service revenues as further discussed below.

Service revenues of $8.4 billion for the three months ended June 30, 2019 increased $495 million, or 6%, primarily due to growth in our average branded customer base driven by the continued growth in existing and Greenfield markets, including the growing success of new customer segments and rate plans such as Unlimited 55+, Military, Business and Essentials, along with record low churn and growth in wearables and other connected devices, partially offset by lower postpaid phone and prepaid Average Revenue Per User (“ARPU”).

Equipment revenues of $2.3 billion for the three months ended June 30, 2019 decreased $62 million, or 3%, primarily due to a decrease in the number of devices sold, excluding purchased leased devices, partially offset by a higher average revenue per device sold.

Operating income of $1.5 billion for the three months ended June 30, 2019 increased $91 million, or 6%, primarily due to higher Service revenues, partially offset by higher Selling, general and administrative expenses, including merger-related costs of $222 million, compared to $41 million for the three months ended June 30, 2018, and higher Costs of services. Operating income for the three months ended June 30, 2018 benefited from hurricane related reimbursements of $70 million.

Net income of $939 million for the three months ended June 30, 2019 increased $157 million, or 20%, primarily due to higher Operating income and lower Other expense. The ~~increase~~impact of merger-related costs was $175 million, net of tax, for the three months ended June 30, 2019, compared to $39 million for the three months ended June 30, 2018. Net income for the three months ended June 30, 2018 benefited from hurricane related reimbursements of $45 million, net of tax.


•	Adjusted EBITDA, a non-GAAP financial measure, of $3.5 billion for the three months ended June 30, 2019 increased $228 million, or 7%, primarily due to higher Operating income driven by the factors described above. See “Performance Measures” for additional information.


•	Net cash provided by operating activities of $2.1 billion for the three months ended June 30, 2019 increased $886 million, or 70%. See “Liquidity and Capital Resources” for additional information.


•	Free Cash Flow, a non-GAAP financial measure, of $1.2 billion for the three months ended June 30, 2019 increased $395 million, or 51%. Free Cash Flow includes $151 million and $17 million in payments for merger-related costs for the three months ended June 30, 2019 and 2018, respectively. See “Liquidity and Capital Resources” for additional information.

Index for Notes to the Condensed Consolidated Financial Statements

Highlights for the six months ended June 30, 2019, compared to the same period in 2018

Total revenues of $22.1 billion for the six months ended June 30, 2019 increased $1.0 billion, or 5%, primarily driven by growth in service and equipment revenues as further discussed below. On September 1, 2016, we sold our marketing and distribution rights to certain existing T-Mobile co-branded customers to a current Mobile Virtual Network Operator (“MVNO”) partner for nominal consideration (the “MVNO Transaction”). The MVNO Transaction shifted Branded postpaid revenues to Wholesale revenues, but did not materially impact total revenues.

Service revenues of ~~$7.6~~$16.7 billion for the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2019 increased ~~$496~~$966 million, or ~~7%. The increase was~~6%, primarily due to growth in our average branded customer base ~~as a result of strong customer response to our Un-carrier initiatives, promotions~~driven by the continued growth in existing and Greenfield markets, including the growing success of ~~our MetroPCS brand.~~new customer segments and rate plans such as Unlimited 55+, Military, Business and Essentials, along with record low churn and growth in wearables and other connected devices, partially offset by lower postpaid phone and prepaid ARPU.

Equipment revenues of ~~$2.1~~$4.8 billion for the ~~three~~six months ended ~~September~~June 30, ~~2017~~,2019 increased ~~$170~~$101 million,, or 9%~~. The increase was~~2%, primarily due to ~~an increase from customer purchases of leased devices at the end of the lease term, the liquidation of returned customer handsets and~~ a higher average revenue per device sold, partially offset by ~~lower lease revenues.~~

a decrease in the number of devices sold, excluding purchased leased devices.

Operating income of ~~$1.3~~$3.0 billion for the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2019 increased ~~$275~~$285 million, or ~~26%. The increase was~~10%, primarily due to ~~an increase in total service~~higher Total revenues, ~~and lower Depreciation and amortization,~~ partially offset by higher Selling, general and administrative expenses, including merger-related costs of $335 million, compared to $41 million for the six months ended June 30, 2018, and higher Cost of ~~services expense and a decrease in Gains on disposal~~services. Operating income for the six months ended June 30, 2018, benefited from hurricane related reimbursements, net of ~~spectrum licenses.~~costs, of $34 million.

Net income of ~~$550 million~~$1.8 billion for the ~~three~~six months ended ~~September~~June 30, ~~2017~~,2019 increased ~~$184~~$394 million,, or ~~50%. The increase was~~27%, primarily due to higher ~~operating~~Operating income ~~driven by the factors described above~~ and ~~a net decrease in interest~~lower Interest expense and Interest expense to affiliates, partially offset by higher ~~income~~Income tax ~~expense primarily due to an increase in income before income taxes and the negative~~expense. The impact ~~from hurricanes. Net incomeincluded~~of merger-related costs was $268 million, net ~~after-tax gains~~ of ~~$18 million and $122 million~~,tax, for the ~~three~~six months ended ~~September~~June 30, ~~2017 and 2016,~~ ~~respectively.~~

~~Adjusted EBITDA (see “Performance Measures”), a non-GAAP financial measure, of~~ ~~$2.8 billion~~ ~~for the~~ ~~three months ended September 30, 2017, increased~~ ~~$133 million, or~~ 5%~~. The increase was primarily due~~2019, compared to ~~higher operating income driven by the factors described above, partially offset by lower Gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of~~ ~~$29 million~~ ~~and~~ ~~$199 million~~ ~~for the~~ ~~three months ended September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~Net cash provided by operating activities of $2.4 billion for the three months ended September 30, 2017, increased $622 million, or 36% (see “Liquidity and Capital Resources”).~~

~~Free Cash Flow, a non-GAAP financial measure, of $921~~$39 million for the ~~three~~six months ended ~~September~~June 30, ~~2017, increased $340 million, or 59% (see “Liquidity and Capital Resources”).~~

~~Highlights~~2018. Net income for the ~~nine~~six months ended ~~September~~June 30, ~~2017, compared~~2018 benefited from hurricane related reimbursements, net of costs, of $22 million, net of tax.


•	Adjusted EBITDA, a non-GAAP financial measure, of $6.7 billion for the six months ended June 30, 2019 increased $556 million, or 9%, primarily due to higher Operating income driven by the factors described above. See “Performance Measures” for additional information.


•	Net cash provided by operating activities of $3.5 billion for the six months ended June 30, 2019 increased $1.5 billion, or 74%. See “Liquidity and Capital Resources” for additional information.


•	Free Cash Flow, a non-GAAP financial measure, of $1.8 billion for the six months ended June 30, 2019 increased $345 million, or 24%. Free Cash Flow includes $185 million and $17 million in payments for merger-related costs for the six months ended June 30, 2019 and 2018, respectively. See “Liquidity and Capital Resources” for additional information.

Index for Notes to the ~~same period in 2016~~

Total revenues of $29.8 billion for the nine months ended September 30, 2017, increased $2.6 billion, or 9%. The increase was primarily driven by growth in service and equipment revenues as further discussed below. On September 1, 2016, we sold our marketing and distribution rights to certain existing T-Mobile co-branded customers to a current Mobile Virtual Network Operator (“MVNO”) partner for nominal consideration (the “MVNO Transaction”). The MVNO Transaction shifted Branded postpaid revenues to Wholesale revenues, but did not materially impact total revenues.

Service revenues of $22.4 billion for the nine months ended September 30, 2017, increased $1.8 billion, or 9%. The increase was primarily due to growth in our average branded customer base as a result of strong customer response to our Un-carrier initiatives, promotions and the success of our MetroPCS brand.

~~Equipment revenues of~~ ~~$6.7 billion~~ ~~for the~~ ~~nine months ended September 30, 2017, increased~~ ~~$680 million, or~~ ~~11%~~. The increase was primarily due to higher average revenue per device sold and an increase from customer purchases of leased devices at the end of the lease term, partially offset by lower lease revenues.Condensed Consolidated Financial Statements

Operating income of $3.8 billion for the nine months ended September 30, 2017, increased $727 million, or 24%. The increase was primarily due to higher Total service revenues and lower Depreciation and amortization, partially offset by lower Gains on disposal of spectrum licenses and higher Selling, general and administrative and Cost of services expenses.

~~Net income of~~ ~~$1.8 billion~~ ~~for the~~ ~~nine months ended September 30, 2017, increased~~ ~~$759 million, or~~ ~~71%~~. The increase was primarily due to higher operating income driven by the factors described above, a lower tax rate primarily due to a reduction in the valuation allowance against deferred tax assets and a net decrease in interest expense, partially offset by the negative impact from hurricanes. Net income included net, after-tax gains of ~~$41 million and $511 million, for the~~ ~~nine months ended September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~Adjusted EBITDA, a non-GAAP financial measure, of~~ ~~$8.5 billion~~ ~~for the~~ ~~nine months ended September 30, 2017, increased~~ ~~$470 million, or~~ 6%. The increase was primarily due to higher operating income driven by the factors described above, partially offset by lower Gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of ~~$67 million~~ ~~and~~ ~~$835 million~~ ~~for the~~ ~~nine months ended September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~Net cash provided by operating activities of $5.9 billion for the nine months ended September 30, 2017, increased $1.4 billion, or 30% (see “Liquidity and Capital Resources”).~~

~~Free Cash Flow, a non-GAAP financial measure, of $1.6 billion for the nine months ended September 30, 2017, increased $898 million, or 130% (see “Liquidity and Capital Resources”).~~

Set forth below is a summary of our unaudited condensed consolidated financial results:


	Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2017			2016			$			%		2017			2016			$			%		Three Months Ended June 30,						Change					Six Months Ended June 30,						Change
(in millions)				(As Adjusted - See Note 1)			$			%					(As Adjusted - See Note 1)			$			%		2019			2018			$			%		2019			2018			$			%
Revenues
Branded postpaid revenues	$	4,920		$	4,647		$	273		6	%	$	14,465		$	13,458		$	1,007		7	%	$	5,613		$	5,164		$	449		9	%	$	11,106		$	10,234		$	872		9	%
Branded prepaid revenues	2,376			2,182			194			9	%	7,009			6,326			683			11	%	2,379			2,402			(23		)	(1	)%	4,765			4,804			(39		)	(1	)%
Wholesale revenues	274			238			36			15	%	778			645			133			21	%	313			275			38			14	%	617			541			76			14	%
Roaming and other service revenues	59			66			(7		)	(11	)%	151			170			(19		)	(11	)%	121			90			31			34	%	215			158			57			36	%
Total service revenues	7,629			7,133			496			7	%	22,403			20,599			1,804			9	%	8,426			7,931			495			6	%	16,703			15,737			966			6	%
Equipment revenues	2,118			1,948			170			9	%	6,667			5,987			680			11	%	2,263			2,325			(62		)	(3	)%	4,779			4,678			101			2	%
Other revenues	272			224			48			21	%	775			670			105			16	%	290			315			(25		)	(8	)%	577			611			(34		)	(6	)%
Total revenues	10,019			9,305			714			8	%	29,845			27,256			2,589			9	%	10,979			10,571			408			4	%	22,059			21,026			1,033			5	%
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	1,594			1,436			158			11	%	4,520			4,286			234			5	%	1,649			1,530			119			8	%	3,195			3,119			76			2	%
Cost of equipment sales	2,617			2,539			78			3	%	8,149			7,532			617			8	%
Cost of equipment sales, exclusive of depreciation and amortization shown separately below																							2,661			2,772			(111		)	(4	)%	5,677			5,617			60			1	%
Selling, general and administrative	3,098			2,898			200			7	%	8,968			8,419			549			7	%	3,543			3,185			358			11	%	6,985			6,349			636			10	%
Depreciation and amortization	1,416			1,568			(152		)	(10	)%	4,499			4,695			(196		)	(4	)%	1,585			1,634			(49		)	(3	)%	3,185			3,209			(24		)	(1	)%
Cost of MetroPCS business combination	—			15			(15		)	NM		—			110			(110		)	NM
Gains on disposal of spectrum licenses	(29		)	(199		)	170			(85	)%	(67		)	(835		)	768			(92	)%
Total operating expense	8,696			8,257			439			5	%	26,069			24,207			1,862			8	%	9,438			9,121			317			3	%	19,042			18,294			748			4	%
Operating income	1,323			1,048			275			26	%	3,776			3,049			727			24	%	1,541			1,450			91			6	%	3,017			2,732			285			10	%
Other income (expense)
Interest expense	(253		)	(376		)	123			(33	)%	(857		)	(1,083		)	226			(21	)%	(182		)	(196		)	14			(7	)%	(361		)	(447		)	86			(19	)%
Interest expense to affiliates	(167		)	(76		)	(91		)	120	%	(398		)	(248		)	(150		)	60	%	(101		)	(128		)	27			(21	)%	(210		)	(294		)	84			(29	)%
Interest income	2			3			(1		)	(33	)%	15			9			6			67	%	4			6			(2		)	(33	)%	12			12			—			—	%
Other income (expense), net	1			(1		)	2			NM		(89		)	(6		)	(83		)	NM
Other expense, net																							(22		)	(64		)	42			(66	)%	(15		)	(54		)	39			(72	)%
Total other expense, net	(417		)	(450		)	33			(7	)%	(1,329		)	(1,328		)	(1		)	—	%	(301		)	(382		)	81			(21	)%	(574		)	(783		)	209			(27	)%
Income before income taxes	906			598			308			52	%	2,447			1,721			726			42	%	1,240			1,068			172			16	%	2,443			1,949			494			25	%
Income tax expense	(356		)	(232		)	(124		)	53	%	(618		)	(651		)	33			(5	)%	(301		)	(286		)	(15		)	5	%	(596		)	(496		)	(100		)	20	%
Net income	$	550		$	366		$	184		50	%	$	1,829		$	1,070		$	759		71	%	$	939		$	782		$	157		20	%	$	1,847		$	1,453		$	394		27	%

Statement of Cash Flows Data
Net cash provided by operating activities	$	2,362		$	1,740		$	622		36	%	$	5,904		$	4,533		$	1,371		30	%	$	2,147		$	1,261		$	886		70	%	$	3,539		$	2,031		$	1,508		74	%
Net cash used in investing activities	(1,455		)	(1,859		)	404			(22	)%	(10,138		)	(4,386		)	(5,752		)	131	%	(1,615		)	(306		)	(1,309		)	428	%	(2,581		)	(768		)	(1,813		)	236	%
Net cash (used in) provided by financing activities	(349		)	(67		)	(282		)	421	%	(527		)	623			(1,150		)	(185	)%

Net cash used in financing activities																							(866		)	(3,267		)	2,401			(73	)%	(1,056		)	(2,267		)	1,211			(53	)%
Non-GAAP Financial Measures
Adjusted EBITDA	$	2,822		$	2,689		$	133		5	%	$	8,502		$	8,032		$	470		6	%	$	3,461		$	3,233		$	228		7	%	$	6,745		$	6,189		$	556		9	%
Free Cash Flow	921			581			340			59	%	1,588			690			898			130	%	1,169			774			395			51	%	1,787			1,442			345			24	%

~~NM - Not Meaningful~~

Index for Notes to the Condensed Consolidated Financial Statements

The following discussion and analysis isare for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, compared to the same ~~periods~~period in ~~2016~~2018 unless otherwise stated.

Total revenues increased ~~$714~~$408 million, or 8%, for the three months ended and $2.6 billion, or 9%, for the nine months ended September 30, 2017, primarily due to higher revenues from branded postpaid and prepaid customers as well as higher equipment revenues as discussed below.

~~Branded postpaid revenues~~ ~~increased $273 million, or 6%~~4%, for the three months ended and $1.0 billion, or 7%5%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2019, as discussed below.

~~The change for the three months ended September 30, 2017 was primarily from:~~

~~Growth in the customer base driven by strong customer response to our Un-carrier initiatives and promotions for services and devices; and~~

~~The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by~~

~~The MVNO Transaction;~~

~~Lower branded~~Branded postpaid ~~phone average revenue per user (“ARPU”); and~~

~~The negative impact from hurricanes of $20 million.~~

~~The change for the nine months ended September 30, 2017 was primarily from:~~

Growth in the customer base driven by strong customer response to our Un-carrier initiatives and promotions for services and devices, including the growing success of our business channel, T-Mobile for Business; and

~~The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by~~

~~The MVNO Transaction; and~~

~~The negative impact from hurricanes of $20 million.~~

~~Branded prepaid~~ revenuesincreased ~~$194~~$449 million, or 9%, for the three months ended and ~~$683~~$872 million, or ~~11%~~9%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, primarily from:

Higher average branded ~~prepaid~~postpaid phone customers, primarily from growth in our customer base driven by the continued growth in existing and Greenfield markets, including the growing success of new customer ~~base;~~segments and rate plans such as Unlimited 55+, Military, Business and Essentials, along with record low churn; and

Higher average branded postpaid other customers, driven by higher wearables and other connected devices, specifically the Apple watch; partially offset by


•	Lower branded postpaid phone ARPU. See “Branded Postpaid Phone ARPU” in the “Performance Measures” section of this MD&A.

Branded prepaid revenues were essentially flat for the three and six months ended June 30, 2019, with higher average branded prepaid ~~ARPU from~~customers driven by the continued success of our ~~MetroPCS brand; partially~~prepaid brands, offset by lower branded prepaid ARPU. See “Branded Prepaid ARPU” in the “Performance Measures” section of this MD&A.

~~The impact from the optimization of our third-party distribution channels; and~~

~~The negative impact from hurricanes of $11 million.~~

Wholesale revenues increased ~~$36~~$38 million, or ~~15%~~14%, for the three months ended and ~~$133~~$76 million, or ~~21%~~14%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, primarily from the ~~impact~~continued success of ~~increased Wholesale revenues resulting from the MVNO Transaction.~~our Mobile Virtual Network Operator (“MVNO”) partnerships.

Roaming and other service revenues ~~decreased $7~~increased $31 million, or ~~11%~~34%, for the three months ended and ~~$19~~$57 million, or ~~11%~~36%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2019, primarily from increases in domestic roaming revenues.

Equipment revenues ~~increased$170~~decreased $62 million, or 9%3%, for the three months ended and ~~$680~~increased $101 million, or ~~11%~~2%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2019.

The ~~change~~decrease for the three months ended ~~September~~June 30, ~~2017~~2019, was primarily from:

~~An increase~~A decrease of ~~$137 million from the purchase of leased devices at the end of their lease term;~~

~~An increase of $116 million primarily related to proceeds from the liquidation of returned customer handsets in the third quarter of 2017;~~

~~An increase of $78~~$86 million in device sales revenues, excluding purchased leased devices, primarily ~~due to:~~

from:

~~Higher average revenue per device sold primarily due to an Original Equipment Manufacturer (“OEM”) recall of its smartphone devices in the third quarter of 2016 and a decrease in promotional spending; partially offset by~~

~~A 5%~~An 11% decrease in the number of devices ~~sold. Device sales revenue is recognized at the time of sale;~~ ~~and~~

~~An increase of $22 million in SIM and upgrade revenue;~~sold, excluding purchased lease devices; partially offset by

~~A decrease of $194 million in lease revenues from declining JUMP! On Demand population due to shifting focus to our EIP financing option beginning in the first quarter of 2016; and~~

~~The negative impact from hurricanes of $8 million.~~

~~The change for the nine months ended September 30, 2017 was primarily from:~~

~~An increase of $413 million in device sales revenues excluding purchased leased devices, primarily due to:~~

Higher average revenue per device sold primarily due to an increase in the high-end device mix; and

A decrease of $34 million in lease revenues primarily due to a lower number of customer devices under lease; partially offset by

An increase of $27 million related to proceeds from liquidations of inventory; and

An increase of $25 million in other equipment-related revenues.

The increase for the six months ended June 30, 2019, was primarily from:

An increase of $50 million in device sales revenues, excluding purchased leased devices, primarily from:

Higher average revenue per device sold due to an increase in the high-end device mix and ~~an OEM recall of its smartphone devices in the third quarter of 2016,~~lower promotions; partially offset by ~~an increase in promotional spending; partially offset by~~

A 1%10% decrease in the number of devices ~~sold. Device sales revenue is recognized at the time of sale;~~sold, excluding purchased leased devices;

AnA $53 million increase ~~of $366~~in other equipment-related revenues; and

A $21 million ~~from the purchase of leased devices at the end of the lease term;~~

An increase ~~of $137 million primarily~~ related to proceeds from ~~the~~ liquidation of ~~returned customer handsets in the third quarter of 2017; and~~

~~An increase of $117 million in SIM and upgrade revenue;~~inventory; partially offset by

A $44 million decrease in lease revenues primarily due to a lower number of customer devices under lease.

Index for Notes to the Condensed Consolidated Financial Statements

Other revenues decreased $25 million, or 8%, for the three months ended and $34 million, or 6%, for the six months ended June 30, 2019, primarily from:

A decrease of ~~$345 million in lease revenues from declining JUMP! On Demand population due to shifting focus to our EIP financing option beginning in the first quarter of 2016; and~~

~~The negative impact from hurricanes of $8 million.~~

Under our JUMP! On Demand program, upon device upgrade or at lease end, customers must return or purchase their device. Revenue for purchased leased devices is recorded as equipment revenues when revenue recognition criteria have been met.

~~Gross EIP device financing to our customers increased by $115~~$46 million for the three months ended and ~~$303~~$92 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 in co-location rental revenue from the adoption of the new lease standard; partially offset by

Higher amortized imputed discount on EIP receivables primarily due to ~~growth~~an increase in ~~the gross amount~~volume of ~~equipment financed on EIP. The increase was also due to certain customers on leased~~ devices ~~reaching the end of lease term who financed their devices over nine-month EIP.~~financed; and

Higher advertising revenues.

Operating expenses increased $439 million, or 5%, for the three months ended and $1.9 billion, or 8%, for the nine months ended September 30, 2017, primarily from higher Cost of services, Cost of equipment sales, Selling, general and administrative and lower Gains on disposal of spectrum licenses, partially offset by lower Depreciation and amortization as discussed below.

~~Cost of services~~ ~~increased $158 million, or 11%, for the three months ended and $234 million, or 5%, for the nine months ended September 30, 2017.~~

~~The change for the three months ended September 30, 2017 was primarily from:~~

~~Higher lease expenses associated with our network expansion;~~

~~The negative impact from hurricanes of~~ ~~$69 million; partially offset by~~

~~Lower regulatory expenses.~~

~~The change for the nine months ended September 30, 2017 was primarily from:~~

~~Higher lease expenses associated with network expansion; and~~

~~The negative impact from hurricanes of $69 million; partially offset by~~

~~Lower long distance and toll costs as we continue to renegotiate contracts with vendors; and~~

~~Lower regulatory expenses.~~

~~Cost of equipment sales~~ ~~increased $78~~$317 million, or 3%, for the three months ended and ~~$617~~$748 million, or 4%, for the six months ended June 30, 2019, primarily from higher Selling, general and administrative expenses and Cost of services as discussed below.

Cost of services, exclusive of depreciation and amortization, increased $119 million, or 8%, for the ~~nine~~three months ended ~~September~~and $76 million, or 2%, for the six months ended June 30, ~~2017.~~2019.

The ~~change~~increase for the three months ended ~~September~~June 30, ~~2017~~2019, was primarily from:

Higher costs for employee-related expenses and network expansion; and

AnHurricane-related reimbursements of $70 million included in the three months ended June 30, 2018; partially offset by

Lower regulatory program costs; and

The positive impact of the new lease standard of approximately $95 million included in the three months ended June 30, 2019 resulting from the decrease in the average lease term and the change in accounting conclusion for certain sale-leaseback sites.

The increase for the six months ended June 30, 2019, was primarily from:

Higher costs for employee-related expenses, customer appreciation programs and network expansion; and

Hurricane-related reimbursements, net of ~~$66~~costs, of $34 million included in the six months ended June 30, 2018; partially offset by

Lower regulatory program costs;

The positive impact of the new lease standard of approximately $190 million in the first half of 2019 resulting from the decrease in the average lease term and the change in accounting conclusion for certain sale-leaseback sites.

Cost of equipment sales, exclusive of depreciation and amortization, decreased $111 million, or 4%, for the three months ended and increased $60 million, or 1%, for the six months ended June 30, 2019.

The decrease for the three months ended June 30, 2019, was primarily from:

A decrease of $87 million in device cost of equipment sales, excluding purchased leased devices, primarily ~~due to:~~

from:

~~A higher average cost per device sold primarily from an OEM recall of its smartphone devices in the third quarter of 2016; partially offset by~~

~~A 5%~~An 11% decrease in the number of devices ~~sold; and~~

~~An increase of $58 million in~~sold, excluding purchased lease ~~device cost of equipment sales, primarily due to:~~

~~An increase in lease buyouts as leases began reaching their term dates in 2017;~~devices; partially offset by

~~A decrease in~~Higher average cost per device ~~upgrades from fewer customers in the handset lease program.~~

~~These increases are partially offset by a decrease of $31 million in cost of equipment related~~sold due to an increase in ~~proceeds from~~high-end device mix; and

A decrease of $46 million in extended warranty costs; partially offset by

An increase of $36 million in costs related to the liquidation of ~~returned customer handsets under our insurance programs; and~~inventory.

~~The negative impact from hurricanes of $4 million.~~

The ~~change~~increase for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019, was primarily from:

An increase of ~~$483~~$113 million in device cost of equipment sales, excluding purchased leased devices, primarily ~~due to:~~

from:

~~A higher~~Higher average cost per device sold ~~primarily from~~due to an increase in high-end device ~~mix and an OEM recall of its smartphone devices in the third quarter of 2016;~~mix; partially offset by

A 1%10% decrease in the number of devices ~~sold;~~sold, excluding purchased lease devices; and

Index for Notes to the Condensed Consolidated Financial Statements

An increase of ~~$245~~$44 million in ~~lease device cost~~costs related to the liquidation of ~~equipment sales, primarily due to:~~

~~An increase in lease buyouts as leases began reaching their term dates in 2017;~~inventory and increased volumes; partially offset by

A decrease of $70 million in ~~device upgrades from fewer customers in the handset lease program.~~extended warranty costs; and

~~These increases are partially offset by a~~A decrease of ~~$69~~$27 million ~~primarily due to inventory adjustments related to obsolete inventory; and~~

~~The negative impact~~ from ~~hurricanes~~lower volume of ~~$4 million.~~

~~Under our JUMP! On Demand program, upon device upgrade or~~returned devices at the end of the lease term, customers must return or purchase their device. The cost of purchased leased devices is recorded as Cost of equipment sales. Returned devices transferred from Property and equipment, net are recorded as inventory and are valued at the lower of cost or market with any write-down to market recognized as Cost of equipment sales.term.

Selling, general and administrative expenses increased ~~$200~~$358 million, or 11%, for the three months ended and $636 million, or 10%, for the six months ended June 30, 2019.

The increase for the three months ended June 30, 2019, was primarily from:

An increase of $181 million in merger-related costs;

Higher costs related to outsourced functions and employee-related costs; and

Higher commissions expense resulting from an increase of $80 million in amortization expense related to commission costs that were capitalized beginning upon the adoption of ASC 606 on January 1, 2018; partially offset by lower commissions expense from lower gross customer additions and compensation structure changes.

The increase for the six months ended June 30, 2019, was primarily from:

An increase of $294 million in merger-related costs;

Higher costs related to outsourced functions;

Higher commissions expense resulting from an increase of $161 million in amortization expense related to commission costs that were capitalized beginning upon the adoption of ASC 606 on January 1, 2018; partially offset by lower commissions expense from lower gross customer additions and compensation structure changes; and

Higher employee-related costs.

Depreciation and amortization decreased $49 million, or 3%, for the three months ended and $24 million, or 1%, for the six months ended June 30, 2019, primarily from:

Lower depreciation expense resulting from a lower total number of customer devices under lease; partially offset by

The continued deployment of low band spectrum, including 600 MHz, and laying the groundwork for 5G.

Operating income, the components of which are discussed above, increased $91 million, or 6%, for the three months ended and $285 million, or 10%, for the six months ended June 30, 2019.

Interest expense decreased $14 million, or 7%, for the three months ended and ~~$549~~$86 million, or 7%19%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019. The decrease for the six months ended June 30, 2019, was primarily ~~from strategic investments to support our growing customer base including higher employee related~~from:

The redemption in April 2018 of aggregate principal amount of $2.4 billion Senior Notes, with various interest rates and maturity dates; and

An increase of $37 million in capitalized interest costs, promotional costs, commissions, and higher costs related to managed services and outsourced functions, partially offset by lower external labor costs. Additionally, the negative impact from hurricanes of $36 million contributedprimarily due to the ~~increase.~~build out of our network to utilize our 600 MHz spectrum licenses.

~~Depreciation and amortization~~Interest expense to affiliates decreased ~~$152~~$27 million, or ~~10%~~21%, for the three months ended and ~~$196~~$84 million, or 4%29%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, primarily from:

~~Lower depreciation expense related to our JUMP! On Demand program resulting from a lower number~~An increase of ~~devices under lease. Under our JUMP! On Demand program, the cost of a leased wireless device is depreciated over the lease term to its estimated residual value; partially offset by~~

~~The continued build-out of our 4G LTE network.~~

~~Cost of MetroPCS business combination~~ ~~decreased $15~~$18 million in capitalized interest costs for the three months ended and ~~$110~~$61 million for ~~the nine~~six months ended ~~September~~June 30, ~~2017. On July 1, 2015, we officially completed~~2019, primarily due to the ~~shutdown~~build out of our network to utilize our 600 MHz spectrum licenses; and

Lower interest rates achieved through refinancing a total of $2.5 billion of Senior Reset Notes in April 2018.

Index for Notes to the Condensed Consolidated Financial Statements

Other expense, net decreased $42 million, or 66%, for the three months ended June 30, 2019 and decreased $39 million, or 72%, for the six months ended June 30, 2019, primarily from:

An $86 million loss during the three months ended June 30, 2018 on the early redemption of $2.5 billion of DT Senior Reset Notes due 2021 and 2022; partially offset by

A $30 million gain during the three months ended June 30, 2018 on the sale of auction rate securities which were originally acquired with MetroPCS; and

During the three months ended June 30, 2019, a $28 million redemption premium on the DT Senior Reset Notes; partially offset by the write-off embedded derivatives upon redemption of the ~~MetroPCS CDMA network. Network decommissioning costs primarily relate~~debt which resulted in a gain of $11 million.

Additional items impacting the six months ended June 30, 2019 include the following:

A $25 million bargain purchase gain as part of our purchase price allocation related to the ~~acceleration~~acquisition of ~~lease costs for cell sites that would have otherwise been~~Iowa Wireless Services, LLC (“IWS”) and a $15 million gain on our previously held equity interest in IWS, both recognized ~~as cost~~during the three months ended March 31, 2018; partially offset by

A $32 million loss on the early redemption of ~~services over~~$1.0 billion of 6.125% Senior Notes due 2022 during the ~~remaining lease term had we not decommissioned the cell sites. We do not expect to incur significant additional network decommissioning costs in 2017.~~three months ended March 31, 2018.

~~Gains on disposal of spectrum licenses~~ ~~decreased $170~~Income tax expense increased $15 million, or ~~85%~~5%, for the three months ended and ~~$768~~$100 million, or ~~92%~~20%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017. The change for the nine months ended September 30, 2017 was primarily from a $636 million gain from a spectrum license transaction with AT&T during the first quarter of 2016.~~

~~Net Income~~ ~~increased $184 million, or 50%, for the three months ended and $759 million, or 71%, for the nine months ended September 30, 2017,~~2019, primarily from higher ~~operating~~ income ~~and a net decrease in interest expense,~~before taxes, partially offset by ~~the negative impact from hurricanes of approximately $90 million.~~ a reduction in certain non-deductible expenses.

Net income for the three months ended September 30, 2017 was partially offset by higher income tax expense as discussed below. Net income for the nine months ended September 30, 2017 additionally included the impact from a lower tax rate as discussed below.

~~Operating income~~, the components of which are discussed above, ~~and include the negative impact from hurricanes,~~ increased ~~$275~~ $157 million,, or ~~26%~~20%, ~~for the~~ ~~three months ended~~ ~~and~~ ~~$727 million, or~~ ~~24%, for the~~ ~~nine months ended September 30, 2017~~.~~The negative impact from the hurricanes for the~~ ~~three and nine months ended September 30, 2017~~ ~~was approximately~~ ~~$148 million.~~

~~Income tax expense~~ ~~increased~~ ~~$124 million, or~~ ~~53%, for the~~ ~~three months ended~~ ~~and decreased~~ ~~$33 million, or~~ 5%~~, for the~~ ~~nine months ended September 30, 2017~~.

~~The change~~ for the three months ended ~~September~~and $394 million, or 27%, for the six months ended June 30, ~~2017 was~~2019, primarily ~~from~~due to higher Operating income ~~before~~and lower interest expense and interest expense to affiliates, partially offset by higher Income tax expense. Net income ~~taxes. The effective~~included the following:

Merger-related costs of $175 million and $268 million, net of tax, ~~rate was 39.3% and 38.8%~~ for the three and six months ended ~~September~~June 30, ~~2017~~2019, respectively, compared to merger-related costs of $39 million, net of tax, for both the three and ~~2016, respectively.~~

~~The change for the nine~~six months ended ~~September~~June 30, ~~2017 was primarily from:~~2018; and

~~A lower effective~~Hurricane related reimbursements, net costs, of $45 million and $22 million, net of tax, ~~rate which was~~ ~~25.3%~~ ~~and~~ ~~37.8%~~ ~~for the~~ ~~nine months ended September 30, 2017~~ ~~and~~ ~~2016, respectively, primarily due to a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions that resulted in the recognition of~~ ~~$270 million~~ ~~in tax benefits in the first quarter of~~ ~~2017~~ ~~and the recognition of an additional~~ ~~$19 million~~ ~~in tax benefits through the third quarter of~~ ~~2017. Total tax benefits related to the reduction in the valuation allowance were~~ ~~$289 million~~ ~~through~~ ~~September 30, 2017. The effective tax rate was further decreased by the recognition of~~ ~~$62 million~~ ~~of excess tax benefits related to share-based payments for the~~ ~~nine months ended September 30, 2017, compared to~~ ~~$24 million~~ ~~for the same period in~~ ~~2016; partially offset by~~

~~Higher income before income taxes.~~

~~See~~ ~~Note 8 - Income Taxes~~ ~~of the~~ ~~Notes to the Condensed Consolidated Financial Statements~~.

~~Interest expensedecreased~~ ~~$123 million, or~~ ~~33%~~, ~~for the~~ ~~three months ended~~ ~~and~~ ~~$226 million, or~~ ~~21%, for the~~ ~~nine months ended September 30, 2017, primarily from:~~

~~The early extinguishment of our LIBOR plus 2.750% Senior Secured Term Loan and redemption of $8.3 billion of Senior Notes; partially offset by~~

~~The issuance of $1.5 billion of Senior Notes in March 2017.~~

~~The decrease for the~~ ~~nine months ended September 30, 2017 was also impacted by the issuance of $1.0 billion of Senior Notes in April 2016.~~

~~Interest expense to affiliates~~ ~~increased~~ ~~$91 million, or~~ ~~120%, for the~~ ~~three months ended~~ ~~and~~ ~~$150 million, or~~ ~~60%, for the~~ ~~nine months ended September 30, 2017, primarily from:~~

~~An increase in interest associated with a $4.0 billion secured Incremental Term Loan Facility with DT entered into in January 2017;~~

~~The issuance of $4.0 billion in Senior Notes to DT in May 2017; and~~

~~Draws on our Revolving Credit Facility; partially offset by~~

~~Lower interest rates achieved through refinancing $2.5 billion of Senior Reset Notes in April 2017.~~

~~The increase~~ for the three and six months ended ~~September~~June 30, ~~2017, was also partially~~2018, respectively. There were no impacts from ~~the net issuance of $500 million in Senior Notes in April 2017.~~

~~See~~ ~~Note 7 – Debt~~ ~~of the~~ ~~Notes to the Condensed Consolidated Financial Statements~~ ~~for additional details.~~

~~Other income (expense), net~~ ~~remained flat~~ ~~for the~~ ~~three months ended and~~ ~~increased~~ ~~$83 million~~ ~~for the~~ ~~nine months ended September 30, 2017. The change for the~~ ~~nine months ended September 30, 2017~~ ~~was primarily from:~~

~~A $73 million net loss recognized from the early redemption of certain Senior Notes; and~~

~~A $13 million net loss recognized from the refinancing of our outstanding Senior Secured Term Loans.~~

~~See~~ ~~Note 7 – Debt~~ ~~of the~~ ~~Notes to the Condensed Consolidated Financial Statements~~.

~~Net income included net, after-tax gains on disposal of spectrum licenses of $18 million and $122 million~~hurricanes for the three and six months ended ~~September~~June 30, ~~2017 and 2016, respectively, and $41 million and $511 million for the nine months ended September 30, 2017 and 2016, respectively.~~2019.

Guarantor Subsidiaries

The financial condition and results of operations of the Parent, Issuer and Guarantor Subsidiaries is substantially similar to our consolidated financial condition. The most significant components of the financial condition of our Non-Guarantor Subsidiaries were as follows:


	September 30, 2017			December 31, 2016				Change						June 30, 2019			December 31, 2018			Change
(in millions)	September 30, 2017						$				%		$				December 31, 2018				%
Other current assets	$	576		December 31, 2016	$	565			$	11			2	June 30, 2019	%	$	678		$	645			$	33		5	%
Property and equipment, net	322			375				(53		)		(14	)%	312			297			15				5	%
Goodwill														218			218			—				NM
Tower obligations	2,204			2,221				(17		)		(1	)%	2,171			2,173			(2		)		—	%
Total stockholders' deficit	(1,386		)	(1,374		)		(12		)		1	%	(1,254	)		(1,142	)		(112		)		10	%

NM - Not Meaningful

Index for Notes to the Condensed Consolidated Financial Statements

The most significant components of the results of operations of our Non-Guarantor Subsidiaries were as follows:


	Three Months Ended September 30,					Change					Nine Months Ended September 30,				Change					Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
(in millions)	2017		2016			$			%		2017		2016		$			%		2019		2018		$		%		2019		2018		$		%
Service revenues	$	527	$	520		$	7		1	%	$	1,580	$	1,500	$	80		5	%	$	767	$	551	$	216	39	%	$	1,499	$	1,091	$	408	37	%
Cost of equipment sales	241		300			(59		)	(20	)%	738		768		(30		)	(4	)%
Cost of equipment sales, exclusive of depreciation and amortization shown separately below																				302		262		40		15	%	574		498		76		15	%
Selling, general and administrative	209		227			(18		)	(8	)%	652		645		7			1	%	293		216		77		36	%	568		452		116		26	%
Total comprehensive income (loss)	40		(19		)	59			(311	)%	87		8		79			988	%
Total comprehensive income																				118		42		76		181	%	245		76		169		222	%



~~DELAWARE~~Delaware		20-0836269
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


~~12920 SE 38th Street, Bellevue, Washington~~		~~98006-1350~~
~~(Address of principal executive offices)~~		~~(Zip Code)~~

(425)	378-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	TMUS	The NASDAQ Stock Market LLC



Class		Shares Outstanding as of ~~October 19, 2017~~July 22, 2019
Common Stock, ~~$0.00001~~ par value $0.00001 per share		~~831,964,098~~854,457,048



PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Consolidated Statement of Stockholders’ Equity	6
		Notes to the Condensed Consolidated Financial Statements	69
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3339
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5662
	Item 4.	Controls and Procedures	5662

PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	5762
	Item 1A.	Risk Factors	5762
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
~~Item 3.~~	~~Defaults Upon Senior Securities~~	57
~~Item 4.~~	~~Mine Safety Disclosures~~	57
~~Item 5.~~	~~Other Information~~	57
~~Item 6.~~	~~Exhibits~~	5767
	~~INDEX TO EXHIBITS~~Item 3.	58Defaults Upon Senior Securities	67
	~~SIGNATURE~~Item 4.	59Mine Safety Disclosures	67
	Item 5.	Other Information	67
	Item 6.	Exhibits	68
		SIGNATURE	69


x	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


¨ ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


(in millions, except share and per share amounts)	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	739		$	5,500		$	1,105		$	1,203
Accounts receivable, net of allowances of $86 and $102	1,734			1,896
Accounts receivable, net of allowances of $61 and $67							1,817			1,769
Equipment installment plan receivables, net	2,136			1,930			2,446			2,538
Accounts receivable from affiliates	24			40			18			11
Inventories	999			1,111
Asset purchase deposit	—			2,203
Inventory							998			1,084
Other current assets	1,817			1,537			1,730			1,676
Total current assets	7,449			14,217			8,114			8,281
Property and equipment, net	21,570			20,943			21,847			23,359
Operating lease right-of-use assets							10,439			—
Financing lease right-of-use assets							2,589			—
Goodwill	1,683			1,683			1,901			1,901
Spectrum licenses	35,007			27,014			36,430			35,559
Other intangible assets, net	256			376			157			198
Equipment installment plan receivables due after one year, net	1,100			984			1,604			1,547
Other assets	858			674			1,707			1,623
Total assets	$	67,923		$	65,891		$	84,788		$	72,468
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	6,071		$	7,152		$	7,260		$	7,741
Payables to affiliates	288			125			198			200
Short-term debt	558			354			300			841
Deferred revenue	790			986			620			698
Short-term operating lease liabilities							2,268			—
Short-term financing lease liabilities							963			—
Other current liabilities	396			405			1,564			787
Total current liabilities	8,103			9,022			13,173			10,267
Long-term debt	13,163			21,832			10,954			12,124
Long-term debt to affiliates	14,586			5,600			13,985			14,582
Tower obligations	2,599			2,621			2,247			2,557
Deferred tax liabilities	5,535			4,938			5,090			4,472
Operating lease liabilities							10,145			—
Financing lease liabilities							1,314			—
Deferred rent expense	2,693			2,616			—			2,781
Other long-term liabilities	967			1,026			913			967
Total long-term liabilities	39,543			38,633			44,648			37,483
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 12)
Stockholders' equity
5.50% Mandatory Convertible Preferred Stock Series A, par value $0.00001 per share, 100,000,000 shares authorized; 20,000,000 and 20,000,000 shares issued and outstanding; $1,000 and $1,000 aggregate liquidation value	—			—
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 833,418,809 and 827,768,818 shares issued, 831,963,343 and 826,357,331 shares outstanding	—			—
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 855,970,789 and 851,675,119 shares issued, 854,452,642 and 850,180,317 shares outstanding							—			—
Additional paid-in capital	39,058			38,846			38,242			38,010
Treasury stock, at cost, 1,455,466 and 1,411,487 shares issued	(4		)	(1		)
Accumulated other comprehensive income	4			1
Treasury stock, at cost, 1,518,147 and 1,494,802 shares issued							(8		)	(6		)
Accumulated other comprehensive loss							(813		)	(332		)
Accumulated deficit	(18,781		)	(20,610		)	(10,454		)	(12,954		)
Total stockholders' equity	20,277			18,236			26,967			24,718
Total liabilities and stockholders' equity	$	67,923		$	65,891		$	84,788		$	72,468



(in millions, except shares)	Common Stock Outstanding		Treasury Shares at Cost			Par Value and Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance as of March 31, 2019	854,380,118		$	(5	)	$	38,100		$	(521	)	$	(11,393	)	$	26,181
Net income	—		—			—			—			939			939
Other comprehensive loss	—		—			—			(292		)	—			(292		)
Stock-based compensation	—		—			143			—			—			143
Exercise of stock options	19,261		—			—			—			—			—
Stock issued for employee stock purchase plan	(36,710	)	—			—			—			—			—
Issuance of vested restricted stock units	206,143		—			—			—			—			—
Forfeiture of restricted stock awards	(20,769	)	—			—			—			—			—
Shares withheld related to net share settlement of stock awards and stock options	(56,041	)	—			(4		)	—			—			(4		)
Repurchases of common stock	—		—			—			—			—			—
Transfer RSU to NQDC plan	(39,360	)	(3		)	3			—			—			—
Balance as of June 30, 2019	854,452,642		$	(8	)	$	38,242		$	(813	)	$	(10,454	)	$	26,967

Balance as of December 31, 2018	850,180,317		$	(6	)	$	38,010		$	(332	)	$	(12,954	)	$	24,718
Net income	—		—			—			—			1,847			1,847
Other comprehensive loss	—		—			—			(481		)	—			(481		)
Stock-based compensation	—		—			264			—			—			264
Exercise of stock options	51,135		—			1			—			—			1
Stock issued for employee stock purchase plan	1,135,801		—			69			—			—			69
Issuance of vested restricted stock units	4,550,115		—			—			—			—			—
Forfeiture of restricted stock awards	(20,769	)	—			—			—			—			—
Shares withheld related to net share settlement of stock awards and stock options	(1,420,662	)	—			(104		)	—			—			(104		)
Repurchases of common stock	—		—			—			—			—			—
Transfer RSU from NQDC plan	(23,295	)	(2		)	2			—			—			—
Prior year retained earnings	—		—			—			—			653			653
Balance as of June 30, 2019	854,452,642		$	(8	)	$	38,242		$	(813	)	$	(10,454	)	$	26,967



Note 1	~~Basis~~Summary of ~~Presentation~~Significant Accounting Policies	79
Note 2	Significant Transactions	1012
Note 3	~~Equipment Installment Plan Receivables~~Business Combinations	1013
Note 4	~~Sales of Certain~~ Receivables	11
~~Note 5~~	~~Spectrum License Transactions~~	14
~~Note 6~~	~~Fair Value Measurements~~ and Allowance for Credit Losses	15
Note 75	~~Debt~~Sales of Certain Receivables	16
Note 86	~~Income Taxes~~	18
~~Note 9~~	~~Earnings Per Share~~Spectrum License Transactions	19
Note 107	~~Commitments and Contingencies~~Fair Value Measurements	2019
Note 118	~~Guarantor Financial Information~~Tower Obligations	21
Note 9	Revenue from Contracts with Customers	21
Note 10	Earnings Per Share	22
Note 11	Leases	23
Note 12	Commitments and Contingencies	23
Note 13	Subsequent Event	26
Note 14	Guarantor Financial Information	27



	Three Months Ended September 30, 2017									Three Months Ended September 30, 2016
(in millions)	Unadjusted			Change in Accounting Principle			As Adjusted			As Filed			Change in Accounting Principle			As Adjusted
Other revenues	$	198		$	74		$	272		$	165		$	59		$	224
Total revenues	9,945			74			10,019			9,246			59			9,305
Operating income	1,249			74			1,323			989			59			1,048
Interest income	76			(74		)	2			62			(59		)	3
Total other expense, net	(343		)	(74		)	(417		)	(391		)	(59		)	(450		)
Net income	550			—			550			366			—			366



	Nine Months Ended September 30, 2017									Nine Months Ended September 30, 2016
(in millions)	Unadjusted			Change in Accounting Principle			As Adjusted			As Filed			Change in Accounting Principle			As Adjusted
Other revenues	$	571		$	204		$	775		$	481		$	189		$	670
Total revenues	29,641			204			29,845			27,067			189			27,256
Operating income	3,572			204			3,776			2,860			189			3,049
Interest income	219			(204		)	15			198			(189		)	9
Total other expense, net	(1,125		)	(204		)	(1,329		)	(1,139		)	(189		)	(1,328		)
Net income	1,829			—			1,829			1,070			—			1,070



	January 1, 2019
(in millions)	Beginning Balance			Cumulative Effect Adjustment			Beginning Balance, As Adjusted
Assets
Other current assets	$	1,676		$	(78	)	$	1,598
Property and equipment, net	23,359			(2,339		)	21,020
Operating lease right-of-use assets	—			9,251			9,251
Financing lease right-of-use assets	—			2,271			2,271
Other intangible assets, net	198			(12		)	186
Other assets	1,623			(71		)	1,552
Liabilities and Stockholders’ Equity
Accounts payable and accrued liabilities	7,741			(65		)	7,676
Other current liabilities	787			28			815
Short-term and long-term debt	12,965			(2,015		)	10,950
Tower obligations	2,557			(345		)	2,212
Deferred tax liabilities	4,472			231			4,703
Deferred rent expense	2,781			(2,781		)	—
Short-term and long-term operating lease liabilities	—			11,364			11,364
Short-term and long-term financing lease liabilities	—			2,016			2,016
Other long-term liabilities	967			(64		)	903
Accumulated deficit	$	(12,954	)	$	653		$	(12,301	)


•	The expected impact on our Condensed Consolidated Statements of Cash Flows is a decrease in Net cash provided by operating activities of $10 millionand a decrease in Net cash used in financing activities of $10 million.



	September 30, 2017						December 31, 2016
(in millions)	Prime		Subprime		Total		Prime		Subprime		Total
Unbilled	$	1,471	$	1,903	$	3,374	$	1,343	$	1,686	$	3,029
Billed – Current	60		90		150		51		77		128
Billed – Past Due	25		50		75		25		48		73
EIP receivables, gross	$	1,556	$	2,043	$	3,599	$	1,419	$	1,811	$	3,230



(in millions)	September 30, 2017			September 30, 2016
Imputed discount and allowance for credit losses, beginning of period	$	316		$	333
Bad debt expense	215			185
Write-offs, net of recoveries	(205		)	(201		)
Change in imputed discount on short-term and long-term EIP receivables	163			103
Impacts from sales of EIP receivables	(126		)	(133		)
Imputed discount and allowance for credit losses, end of period	$	363		$	287



	June 30, 2019									June 30, 2018
(in millions)	Accounts Receivable Allowance			EIP Receivables Allowance			Total			Accounts Receivable Allowance			EIP Receivables Allowance			Total
Allowance for credit losses and imputed discount, beginning of period	$	67		$	449		$	516		$	86		$	396		$	482
Bad debt expense	31			113			144			25			103			128
Write-offs, net of recoveries	(37		)	(127		)	(164		)	(41		)	(119		)	(160		)
Change in imputed discount on short-term and long-term EIP receivables	N/A			89			89			N/A			102			102
Impact on the imputed discount from sales of EIP receivables	N/A			(84		)	(84		)	N/A			(98		)	(98		)
Allowance for credit losses and imputed discount, end of period	$	61		$	440		$	501		$	70		$	384		$	454



	June 30, 2019						December 31, 2018
(in millions)	Prime		Subprime		Total EIP Receivables, gross		Prime		Subprime		Total EIP Receivables, gross
Current - 30 days past due	$	2,222	$	2,177	$	4,399	$	1,987	$	2,446	$	4,433
31 - 60 days past due	14		30		44		15		32		47
61 - 90 days past due	6		17		23		6		19		25
More than 90 days past due	7		17		24		7		22		29
Total receivables, gross	$	2,249	$	2,241	$	4,490	$	2,015	$	2,519	$	4,534



(in millions)	2019
Balance at December 31, 2018	$	35,559
Spectrum license acquisitions	857
Spectrum licenses transferred to held for sale	—
Costs to clear spectrum	14
Balance at June 30, 2019	$	36,430



(in millions)	Spectrum Licenses
Balance at December 31, 2016	$	27,014
Spectrum license acquisitions	8,247
Spectrum licenses transferred to held for sale	(271		)
Costs to clear spectrum	17
Balance at September 30, 2017	$	35,007



	Level within the Fair Value Hierarchy	June 30, 2019				December 31, 2018
(in millions)	Level within the Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Deferred purchase price assets	3	$	763	$	763	$	746	$	746



(in millions)	December 31, 2016		Issuances and Borrowings ⁽¹⁾		Note Redemptions ⁽¹⁾			Extinguishments ⁽¹⁾			Repayments			Other ⁽²⁾		September 30, 2017
Short-term debt	$	354	$	—	$	—		$	(20	)	$	—		$	224	$	558
Long-term debt	21,832		1,495		(8,365		)	(1,947		)	—			148		13,163
Total debt to third parties	22,186		1,495		(8,365		)	(1,967		)	—			372		13,721
Short-term debt to affiliates	—		2,910		—			—			(2,910		)	—		—
Long-term debt to affiliates	5,600		8,985		—			—			—			1		14,586
Total debt to affiliates	5,600		11,895		—			—			(2,910		)	1		14,586
Total debt	$	27,786	$	13,390	$	(8,365	)	$	(1,967	)	$	(2,910	)	$	373	$	28,307



(in millions)	Principal Issuances		Issuance Costs		Net Proceeds from Issuance of Long-Term Debt
4.000% Senior Notes due 2022	$	500	$	2	$	498
5.125% Senior Notes due 2025	500		2		498
5.375% Senior Notes due 2027	500		1		499
Total of Senior Notes Issued	$	1,500	$	5	$	1,495



(in millions)	Principal Amount		Write-off of Premiums, Discounts and Issuance Costs ⁽¹⁾			Call Penalties^{(1) (2)}		Redemption Date	Redemption Price
6.625% Senior Notes due 2020	$	1,000	$	(45	)	$	22	February 10, 2017	102.208	%
5.250% Senior Notes due 2018	500		1			7		March 4, 2017	101.313	%
6.250% Senior Notes due 2021	1,750		(71		)	55		April 1, 2017	103.125	%
6.464% Senior Notes due 2019	1,250		—			—		April 28, 2017	100.000	%
6.542% Senior Notes due 2020	1,250		—			21		April 28, 2017	101.636	%
6.633% Senior Notes due 2021	1,250		—			41		April 28, 2017	103.317	%
6.731% Senior Notes due 2022	1,250		—			42		April 28, 2017	103.366	%
Total note redemptions	$	8,250	$	(115	)	$	188


~~(1)~~	Write-off of premiums, discounts, issuance costs and call penalties are included in Other income (expense), net in our Condensed Consolidated Statements of Comprehensive Income. Write-off of premiums, discounts and issuance costs are included in Other, net within Net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows.


~~(2)~~	~~The call penalty is the excess paid over the principal amount. Call penalties are included within Net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows.~~



(in millions)	Net Proceeds from Issuance of Long-Term Debt		Extinguishments			Write-off of Discounts and Issuance Costs ⁽¹⁾
LIBOR plus 2.00% Senior Secured Term Loan due 2022	$	2,000	$	—		$	—
LIBOR plus 2.00% Senior Secured Term Loan due 2024	2,000		—			—
LIBOR plus 2.750% Senior Secured Term Loan ⁽²⁾	—		(1,980		)	13
Total	$	4,000	$	(1,980	)	$	13


~~(2)~~	~~Our Senior Secured Term Loan extinguished during the nine months endedSeptember 30, 2017 was Third Party debt.~~



(in millions)	Principal Issuances (Redemptions)			Discounts ⁽¹⁾			Net Proceeds from Issuance of Long-Term Debt
4.000% Senior Notes due 2022	$	1,000		$	(23	)	$	977
5.125% Senior Notes due 2025	1,250			(28		)	1,222
5.375% Senior Notes due 2027 ⁽²⁾	1,250			(28		)	1,222
6.288% Senior Reset Notes due 2019	(1,250		)	—			(1,250		)
6.366% Senior Reset Notes due 2020	(1,250		)	—			(1,250		)
Total	$	1,000		$	(79	)	$	921


~~(1)~~	~~Discounts reduce Proceeds from issuance of long-term debt and are included within Net cash (used in) provided by financing activities in our Condensed Consolidated Statements of Cash Flows.~~


~~(2)~~	In April 2017, we issued to DT $750 million in aggregate principal amount of the 5.375% Senior Notes due 2027, and in September 2017, we issued to DT the remaining $500 million in aggregate principal amount of the 5.375% Senior Notes due 2027.



(in millions)	Principal Issuances		Premium		Net Proceeds from Issuance of Long-Term Debt
5.300% Senior Notes due 2021	$	2,000	$	—	$	2,000
6.000% Senior Notes due 2024	1,350		40		1,390
6.000% Senior Notes due 2024	650		24		674
Total	$	4,000	$	64	$	4,064



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2019		2018		2019		2018
Branded postpaid service revenues
Branded postpaid phone revenues	$	5,287	$	4,892	$	10,470	$	9,703
Branded postpaid other revenues	326		272		636		531
Total branded postpaid service revenues	$	5,613	$	5,164	$	11,106	$	10,234



(in millions)	Contract Assets Included in Other Current Assets			Contract Liabilities Included in Deferred Revenue
Balance as of December 31, 2018	$	51		$	645
Balance as of June 30, 2019	42			571
Change	$	(9	)	$	(74	)



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except shares and per share amounts)	2019		2018		2019		2018
Net income	$	939	$	782	$	1,847	$	1,453

Weighted average shares outstanding - basic	854,368,443		847,660,488		852,796,369		851,420,686
Effect of dilutive securities:
Outstanding stock options and unvested stock awards	5,767,150		4,380,182		8,094,501		7,308,146
Weighted average shares outstanding - diluted	860,135,593		852,040,670		860,890,870		858,728,832

Earnings per share - basic	$	1.10	$	0.92	$	2.16	$	1.71
Earnings per share - diluted	$	1.09	$	0.92	$	2.14	$	1.69

Potentially dilutive securities:
Outstanding stock options and unvested stock awards	67,856		797,948		39,342		487,133